Erdemir will ensure that the majority of its pellet needs are met from domestic sources. The facility will be established at the mine site of the group company Ermaden in Bingöl-Avnik.
Erdemir, the largest integrated flat steel producer in Türkiye, is making another strategic investment. By establishing a pelleting facility with an investment of 550 million dollars, Erdemir will ensure that the majority of its pellet needs are met from domestic sources. The facility will be established at the mine site of the group company Ermaden in Bingöl-Avnik.
OYAK General Manager Süleyman Savaş Erdem said, “With this investment, we will significantly reduce external dependence on pellets, one of Erdemir's most important raw material items, and we will make a strong contribution to employment in the region.”
Erdemir, the largest integrated flat steel producer in Türkiye, increases its competitiveness with its investments and acquisition activities. Continuing its efforts to create value for the country and its stakeholders, Erdemir is making a strategically important investment that will significantly reduce foreign dependency in a critical raw material in the iron and steel industry.
Erdemir will establish a pelleting facility with an investment of approximately 550 million dollars in the iron mine site of the group company Ermaden in Bingöl-Avnik. Aiming to bring Turkey's national and domestic resources into the economy, this investment will make a great contribution to employment both in the installation and operation phases. The facility, the foundation of which will be laid in the 100th anniversary of our Republic, is planned to be operational within 36 to 42 months.
As a result of intensive reserve exploration and development activities carried out in the region for the last two years, Ermaden has detected around 250-300 million tons of magnetite iron ore resources. In order to process this resource and bring it into the Turkish economy, Erdemir decided to establish a pelleting facility with an enrichment and pellet production capacity of 3 million tons per year. In the facility to be established, it is aimed to produce more than 100 million tons of pellets within the scope of the iron ore reserve in question.
Important step in backward integration
Drawing attention to the value that the investment in Bingöl will create for the Turkish economy, OYAK General Manager and Erdemir Board Chairman Süleyman Savaş Erdem said, “It is vital to have a self-sufficient reserve structure in pellet production. With this strategic investment to be made in the iron ore mining operation in Bingöl, Erdemir will take a big step in backward integration and will significantly reduce foreign dependency in its most important raw material item. At the same time, we anticipate that 3 million tons of pellets to be produced annually will not only reduce the annual imports by 600 million dollars at current prices, but also bring an additional gross profitability of 200-250 million dollars per year to Erdemir. In addition to the contribution it will provide to Erdemir with the targeted 100 million tons of pellet production tonnage, the benefit it will provide to the country's economy with its import-reducing effect will create a very important value. The facility, which will be established with Erdemir's power and experience in the steel industry and Ermaden's expertise in mining, will ensure that most of the needs of Erdemir, one of the OYAK Group Companies, will be met from national and domestic resources. I wish this investment to be beneficial for our country's economy, our stakeholders and our members.”
Great contribution to employment
The facility to be established will create significant employment in the entire region and will make a significant contribution to the regional economy by providing employment for more than 2,000 people during the construction processes of the facility and approximately 1,000 people when it is operational.
The facility will also mitigate the impact of trade quotas, emissions trading systems, commodity crises and disruptions in the supply chain, which have deeply affected the steel industry in recent years, with the high profitability it will provide, and will serve to the competitiveness and sustainability of the group.
